Tamil Nadu is well-positioned to become a hub for furniture production and exports as global companies seek alternatives to China. The state has skilled manpower and access to ports, along with a rising domestic demand. The Indian furniture market is valued at $32 billion, with a growth rate of 20%-25%. The government is reaching out to both domestic and overseas furniture manufacturers to establish facilities, with a priority for the international furniture park at Tuticorin. The park aims to create a better ecosystem, reduce production costs, and increase competitiveness in the sector.
Tamil Nadu can transform into a hub for furniture production and exports as global companies are aggressively pursuing the ‘China plus one policy’, exploring alternatives to China. Government and industry sources are upbeat about the state’s prospects given its skilled manpower and access to ports.
Domestic demand too is rising as IT and other sectors expand offices to smaller towns.
Industry estimates this market alone to be $300 million. The value of the Indian furniture market is pegged at $32 billion, with a compound annual growth rate of 20%-25%. And potential for exports is huge since India has only 5% share of the world market.
Moreover, the India Australia Economic Cooperation and Trade Agreement (ECTA) and India-UAE Comprehensive Economic Partnership Agreement (CEPA) signed last year offer zero-duty market access for made-in-India furniture to these markets.
To start with, the government is reaching out to domestic and overseas furniture manufacturers to establish facilities in the state with priority for the international furniture park at Tuticorin, which is expected to attract investment of `4,000 crore. It will house industries making furniture using wood and medium density fibreboard (MDF).
The products include sliding and folding doors, MDF boards and home furniture such as sofas, chairs, dining tables and chests of drawers. According to state industry department sources, three companies have signed MoUs to set up units at Tuticorin, including one from Germany and an Indian subsidiary of a Geneva-based company.
Shankar Vanavarayar, chairman, CII Tamil Nadu state council, says the park seeks to create a better ecosystem to meet 70%-80% of the raw material demand, drastically reduce production costs and increase the competitiveness of Tamil Nadu in the furniture sector. “It will be a game changer in the industrialisation of southern districts.” While the government is pushing for the entry of new players, domestic and foreign companies with factories in different parts of Tamil Nadu are expanding their presence.
For instance, US-headquartered global workspace solutions company Haworth, which has a manufacturing unit at Sriperumbudur, is investing $8 million-$10 million to set up its second plant at the same location. The company also launched its global shared services centre in Chennai in September this year. Praveen Rawal, vice president, sales, Asia Pacific, Haworth, says the company chose Sriperumbudur for the supply chain convenience and the access to ports.
Tamil Nadu was one of the first states to promote organised furniture manufacturing two decades ago — at the SIDCO industrial estate in Kakkalur near Tiruvallur. A couple of joint ventures with international companies were started. But, expansion was stunted as Indian manufacturers could not compete with the prices of imported wood furniture.
China, Vietnam and Indonesia were the early birds in this segment, says S Swaminathan, founder and managing director, Woodpecker Furniture, one of the first organised manufacturer-retailers in Chennai. “Of late, people are looking for alternatives for China. In such a scenario, Tamil Nadu with its infrastructure and ports can be an alternative. For this, we should be top notch in furniture production and service,” he says. Investments in technology and machinery are key, he adds.
Industry sources say ready-to-assemble home furniture accounts for 60-70% of domestic demand. Most of the furniture is made using engineered wood. Balaji V, director, marketing of Coimbatore headquartered Repose Mattress, says the furniture sector is more to do with the MSMEs, where the support of the government is essential. Ten-year-old Repose Mattress, which is currently manufacturing cots on a small scale, is expanding its portfolio to sofas, recliners and chairs over the next five years.
“Proprietary designs is one area that we must focus on,” he says. Industries secretary V Arun Roy says Tamil Nadu has sufficient workforce as industrial training institutes (ITIs) are offering courses in carpentry. “If there is a skill gap and there is a requirement from industry, the government will address it,” he says. The furniture sector will be featured to attract investors at the Global Investors Meet in January 2024, adds Roy. Courtesy: https://timesofindia.indiatimes.com/city/chennai/furniture-is-the-future/articleshow/104999876.cms